Economic crisis heightens financial fallout for bereaved

Sunday 21 June 2009

A drop in the value of some older people's savings and investments during the current economic crisis will worsen the financial difficulties already felt by many when their partner dies. New research funded by the Economic and Social Research Council into the financial implications of bereavement highlights the potentially devastating economic consequences of a partner's death.

One in five people fall below the official poverty line following the death of their partner. "Hence the recent fall in the value of annuities, savings and investments means an even wider group of older people could face financial difficulties when their partner dies, whether these difficulties are short-lived or longer lasting," says researcher Anne Corden of the Social Policy Research Unit, University of York.

People, whose partners had been in paid work, reported the largest income falls, mainly affecting those under pension age. Women with or without children were more at risk of financial decline than men and two in five women pensioners were in poverty immediately after bereavement. While some of these experiences of poverty were short-lived, bereaved women were more likely to experience poverty lasting up to three years after the death.  The number of women feeling financially worse off doubled from 24 per cent to 48 per cent. Comparable figures for men were 19 and 30 per cent respectively.

Based on its exploration of a wide range of economic, administrative, emotional, and psychological issues following the death of a partner, the study highlights the need for:

Better awareness of financial issues

  • Findings highlighted the financial consequences of the failure to make a will and the mistaken belief that 'common law marriage' provides legal rights.
  • "Many people still put off thinking about their will or their finances until they are older and by then, for some, it is too late," Corden points out.
  • The study highlights the importance of financial awareness within the general population.
  • The need to make financial preparations and decisions as a couple during earlier stages of their life together.

Easing adjustment to loss

  • Grief has economic elements which impact on the grieving process and adjustment to loss. Managing money, and taking on new economic roles was hard for some bereaved people.
  • The study suggests that raising financial awareness should include planning and preparation for death.
  • Government, employers and unions have opportunities to provide information at various key points during a person's life.

Reducing administrative and regulatory burdens

  • Researchers found that the administrative requirements related to financial transitions caused a considerable practical and emotional burden.
  • Most people had to deal with diverse administrative and regulatory bodies. The volume of work required, delays, errors and problems in communication were widely experienced as an overwhelming burden.
  • Researchers highlight the need of processes to help people find information they need quicker, staff with skills for dealing with people in grief, and data sharing to reduce documentation required, would increase business efficiency as well as trust and compliance among service users.

Counselling support for 'economic components' of grief

  • Supporting bereaved people who want to share feelings about their financial situation and new economic roles may ease adjustment to their loss.
  • Findings suggest that while it is not the role of bereavement counselling services to provide expertise in all the administrative and financial aspects of bereavement, they would benefit from greater awareness of the emotional impact of changed financial circumstances on the bereaved person.

Financial support for the bereaved

  • Immediate financial demands facing bereaved people included paying for the funeral and housing costs including changes in home ownership and tenancy.
  • After a death, information and advice about benefits, pensions and tax, as well as support in accessing financial services help people avoid financial hardship.
  • Researchers suggest that when policymakers review financial support for bereaved people, there should be thorough examination of entitlement, take-up and impact of bereavement benefits and social fund funeral expenses payments, and people's perceptions of these payments.

Researchers conclude that some financial difficulties following death of a partner can be prevented; others can be avoided. Policymaking must address the immediate circumstances of people experiencing bereavement. In the long term, enabling people to sustain paid employment throughout their working lives, occupational and private pensions, will help ensure an acceptable standard of living in retirement and protect people whose partner has died from financial hardship and economic decline.

For further information contact

ESRC Press Office:

Notes for editors

  1. This release is based on the findings from 'Financial implications of death of a partner' (Grant RES-000-23-1530) funded by the Economic and Social Research Council and carried out by Anne Corden, Michael Hirst and Katharine Nice of the Social Policy Research Unit, University of York.
  2. The study mixed qualitative and quantitative methods including: in-depth interviews with 44 people at different life stages whose partner had died recently and longitudinal analysis of data from the British Household Panel Survey (BHPS) from over 750 couples where one partner had died. Interviews were conducted in 2007 and 2008; the BHPS study sample was drawn from 14 annual sets of data covering 1991 to 2004.
  3. A four page Research Works briefing highlighting the key points from this study (PDF) can be downloaded from the Social Policy Research Unit website.
  4. The Economic and Social Research Council (ESRC) is the UK's largest organisation for funding research on economic and social issues. It supports independent, high quality research which has an impact on business, the public sector and the third sector. The ESRC's planned total expenditure in 2009/10 is £204 million.  At any one time the ESRC supports over 4,000 researchers and postgraduate students in academic institutions and independent research institutes.
  5. The ESRC confirms the quality of its funded research by evaluating research projects through a process of peer review. This research has been graded as 'good'.